Union Czar’s Famous Boast Illuminates Today’s State Fiscal Crises

An October 27, 1975 New York magazine feature article by journalist Ken Auletta examined the causes of the Big Apple’s financial implosion that year. Three-and-a-half decades later, the article is still remembered for a remarkable quote from government union bigwig Victor Gotbaum.

The then-head of the extraordinarily powerful, Manhattan-based District Council 37 of the American Federation of State, County and Municipal Employees (AFSCME) union had “recently remarked,” the story reported: “We have the ability, in a sense, to elect our own boss.”

Mr. Gotbaum was alluding to the fact that, in jurisdictions like New York, where union monopoly bargaining over the pay, benefits, and working conditions of public servants is authorized by law, union bosses negotiate with government officials over such issues. At the same time, government union chiefs funnel a huge portion of the (often compulsory) dues and fees they collect from unionized workers into efforts to influence the outcomes of local and state elections.

And the outcomes of those elections often determine who represents the public at the bargaining table.

“In city after city and state after state, union bosses wield their privilege to force public employees to pay union dues, or be fired, to amass huge war chests, with which they support and oppose candidates for public office,” explained National Right to Work Committee President Mark Mix.

“Big Labor thus determines who sits on one side of the bargaining table, and heavily influences who sits on the other. It is a terrible conflict of interest, which Victor Gotbaum plainly recognized, even as he bragged about it.

“Mr. Gotbaum retired years ago, but his observation about how monopolistic unionism works in practice in the public sector is even more pertinent today than when he first uttered it.”

High Government-Union-Density States Regarded as ‘Most Likely to Default’

It is for that reason that, when Mr. Mix testified before the U.S. House Oversight and Government Reform Committee April 14 regarding the severe long-term fiscal imbalances now faced by many states and localities, he drew heavily on Mr. Gotbaum’s insight.

“Excessive spending, taxation and debt are endemic to governments everywhere, but there are large, measurable differences between the states that have handed monopoly privileges to public-sector union officials, and states that have resisted the pressure,” Mr. Mix explained to panel members.

To illustrate the differences, Mr. Mix cited several sources, including a May 2010 analysis published on the Business Insider web site.

Business Insider rated heavily unionized California, Illinois, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio and Wisconsin as the worst default risks for a totally objective reason: Traders who wished to buy protection against the possibility of default by these nine states had to pay higher premiums (technically known as “CDS spreads”) than did traders seeking protection against default risk for any of the other 41.

As Mr. Mix pointed out to the panel, an average of 61% of public-sector employees in the nine worst default-risk states were under union monopoly bargaining in 2009. That is, overall public-sector unionization was 20 percentage points higher than in a typical state. And not one of the 22 states with 2009 public-sector unionization of under 30% was to be found on Business Insider’s “most likely to default” list.

Union Bosses Win and Taxpayers Lose, Either Way

Monopolistic government unionism sometimes results in higher pay and more lavish benefits for public employees, but that is not its basic goal.

In fact, government union bosses often resist productivity-enhancing capital investments that would likely make employees’ jobs easier and raise per employee compensation, but reduce the ranks of union dues-payers over time.

The real focus of government union officials is to transform public employees into a reliable source of money and power for a private interest group, namely Organized Labor.

Regardless of whether government union bosses corrupt employees by, for example, encouraging them to retire with full pension benefits while they are still in their prime working years, or exploit them by, say, blocking back-sparing productivity enhancements, taxpayers end up getting hurt.

That’s why, concluded Mr. Mix, in all states that now have laws on the books authorizing forced union dues and fees and union monopoly bargaining in the public sector, repealing those laws is critical for making government agencies more accountable and affordable.

National Right to Work Committee Has Boosted Grass-Roots Lobbying Efforts

In addition to Mr. Mix, several experts on state budgetary matters and Govs. Scott Walker (R-Wisc.) and Peter Shumlin (D-Vermont) accepted invitations to testify at the April 14 hearing. It was held by Oversight and Government Reform Chairman Darrell Issa (R-Calif.).

On March 11, Mr. Walker enraged union officials across America when, heeding the pleas of freedom-loving citizens, he signed into law a measure (S.B.11) abolishing all forced union dues and fees for teachers and many other public employees and also sharply limiting the scope of union monopoly bargaining.

Even though union bosses and their allied politicians have so far kept the new Wisconsin Right to Work law tied up in court and prevented it from taking effect, its approval “constitutes an important victory for freedom-loving Americans,” said Mr. Mix after returning to Committee headquarters in Springfield, Va.

“Thanks largely to the generosity and persistence of National Committee members, we have been able this year to assist not only the drive to enact the Wisconsin law protecting most public employees’ Right to Work, but also the new Ohio law [S.B.5] that bars all forced union dues and fees in the public sector.

“And just last month, National Committee members helped citizen activists in Right to Work Oklahoma pass legislation [H.B.1593] denying government union bosses the legal power to force municipal officials to recognize them as public employees’ ‘exclusive’ bargaining agents.”

Right to Work Gains Remain Very Fragile

“Of course, Big Labor is far from ready to accept the idea that its public-sector forced-unionism privileges can be rolled back. In addition to union boss-puppet politicians’ court challenge of S.B.11 in Wisconsin, union bigwigs have launched a lavishly funded campaign to overturn S.B.5 in a statewide Ohio referendum this fall,” Mr. Mix acknowledged.

“Right to Work’s recent gains against government union bosses remain very fragile. Many politicians, such as Mr. Shumlin, continue to deny there is even a problem with monopolistic unionism in government.

“They are parroting the line of International Association of Firefighters union czar Harold Schaitberger, who recently referred to the estimated $3 trillion in total long-term debt held by the 50 states as a ‘fictional’ crisis and a ‘distraction.’

“Mr. Schaitberger and company will say and do anything to preserve the status quo, highly lucrative for them, of union monopoly in government and crush the Right to Work shoots that have recently sprung up in Wisconsin and Ohio.